SaaS license management software is a cloud-based solution that helps organizations track, buy, delete and optimize their software licenses and subscriptions. This allows anyone in the organization to see real-time costs and pay one single fee per month across all SaaS licenses. Having a solid SaaS license management tool assists in your FinOps practice or overall governance in the organization.
Key features in a SaaS License Management Portal typically include:
1. Centralized License Tracking
- Monitor software licenses across entire organization
- Track license counts, expiration dates, and usage
2. Cost Optimization
- Identify unused or underutilized software licenses
- Reduce unnecessary software spending
- Prevent over-purchasing or duplicate licenses
3. Compliance Management
- Ensure compliance with software vendor licensing agreements
- Avoid potential legal risks and unexpected audit penalties
- Maintain accurate records of software assets
4. Automated Renewal and Procurement
- Set automatic renewal reminders
- Streamline software procurement processes
- Provide insights for strategic software purchasing decisions
5. Usage Monitoring
- Track software usage metrics
- Analyze user engagement with different applications
- Help make informed licensing decisions
Common use cases include enterprise IT departments, software asset managers, and organizations with complex software ecosystems needing centralized license management.
The Hidden Challenges of SaaS Licensing
1. Shadow IT: The Silent Threat
Employees purchasing software without IT’s knowledge can create significant risks:
- Compliance violations
- Security exposures
- Unnecessary duplicate subscriptions
- Potential regulatory non-compliance
2. License Waste: A Costly Problem
Shocking statistics reveal:
- 38% of SaaS licenses go unused
- Many users log in less than once per month
- Automatic renewals can lead to forgotten subscriptions
3. Licensing Complexity
Different SaaS licensing models complicate management:
- User-Based Licensing: Each user gets an individual license
- Usage-Based Licensing: Pay for application use
- Flat Rate: Fixed monthly or annual pricing
- Tiered Pricing: Cost increases with added features
Best Practices for SaaS License Management
1. Comprehensive Inventory
- Catalog all existing SaaS assets
- Track license owners
- Identify potential duplicate subscriptions
- Document associated costs and contracts
2. Usage Tracking
- Monitor application utilization
- Identify underused and overused licenses
- Optimize subscription levels
- Eliminate unnecessary expenditures
3. Four Critical Data Streams
- Financial Payment Data: Understand total vendor expenses
- Vendor Contract Details: Manage relationship risks
- License Consumption Data: Correlate usage with business value
- Tribal Knowledge: Centralize institutional software information
4. Strategic Communication
- Involve all stakeholders
- Create clear management processes
- Establish ongoing license review protocols
The Employee Lifecycle and License Management
Onboarding
- Grant immediate, appropriate access
- Prevent productivity delays
- Implement structured access protocols
Role Changes
- Adjust access rights dynamically
- Manage privileged access carefully
- Remove unnecessary permissions
Offboarding
- Immediately revoke all access
- Protect sensitive company data
- Prevent potential security breaches
Top Three SaaS Spending Pitfalls
- Unused Licenses: Forgotten subscriptions drain budgets
- Underutilized Applications: Paying for unused features
- Redundant Tools: Multiple applications with overlapping functionality
Key Roles in SaaS License Management
- IT Admin: Manages application permissions
- Contract Owner: Primary decision-maker
- Billing Recipient: Handles financial transactions
- Software Asset Manager: Oversees software lifecycle
- Cloud Operations: Monitors cloud application deployment
Financial Implications
Consider this eye-opening fact: Companies now spend more on SaaS applications than on employee laptops. Strategic management isn’t just good practice—it’s financial necessity.
Recommended Action Steps
- Conduct a comprehensive SaaS audit
- Implement centralized tracking
- Establish clear procurement guidelines
- Create robust onboarding/offboarding processes
- Regularly review and optimize subscriptions
Conclusion: Transform Complexity into Opportunity
SaaS license management is no longer a back-office function—it’s a strategic business imperative. By implementing thoughtful, proactive management strategies, organizations can:
- Reduce unnecessary spending
- Enhance security
- Improve operational efficiency
- Align technology investments with business goals
Free SaaS License Management Software using our Nexus Portal
We offer all customers a free SaaS license management portal where they can load, buy, delete and optimize all of their licenses in one place. This is the first step in their FinOps and IT expense governance process with a free online Portal to consolidate all of their SaaS license costs into a single pane of glass.
Here’s an example view of buying Microsoft Office 365 Licensing with upfront pricing options including month-to month.
If you would like our Free Nexus Portal to manage many of your SaaS applications, costs and users, please reach out to us and we will set you up!